GOVERNOR SIGNS BILL TO EXEMPT MANY INDEPENDENT WORKERS FROM AB 5

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Update September 5, 2020 : Governor Gavin Newsom has signed this bill into law. It takes effect immediately as an emergency measure.
 
By Miriam Raftery
 
September 3, 2020 (Sacramento) – A bill to exempt many occupations from AB 5, California’s controversial new employment law, and allow those exempted to work as independent contractors instead of employees, has passed the Legislature overwhelmingly. Governor Gavin Newsom is expected to sign the measure, AB 2257, into law. If signed, it would take effect immediately as an urgency measure. View full text of AB 2257.
 
The trouble began in 2018 when the state Supreme Court’s decision in the Dynamex case imposed a strict new test of employment status in California’s burgeoning gig economy.  AB 5, authored by Lorena Gonzalez (D-San Diego), sought to codify the court ruling but went farther, requiring that a broad range of freelancers and independent contractors be treated as employees eligible for benefits ranging from unemployment to medical care.
 
AB 5 triggered a backlash of criticism from many freelancers whose income and flexibility were severely impacted, including musicians, writers, translators and many others walloped first by AB 5, and then by the COVID-19 pandemic and shutdown.

AB 2257, if signed into law, will exempt a wide range of occupations including many musicians. The exemption includes musicians playing short-term gigs as well as recording artists, song writers, producers and many others.  However, musicians who play at large venues such as music festivals or venues with 1,500 attendees or more must still be treated as employees.
 
Other exemptions include translators and  interpreters, wedding planners, wedding and event vendors, yard cleanup, independent radio promoters, appraisers, youth sports coaches, pool cleaners, architects, accountants, investigators, registered foresters, illusionists, competition judges, individual performance artists, performers teaching master classes, manufactured housing salespersons, and people involved in international exchange visitor programs, psychologists and puppeteers, to name a few.  
 
In addition, freelance writers, photographers and illustrators will no longer have a cap of 35 submissions a year.
 
Many real estate, home inspection, underwriting and financial services can also be provided by independent contractors under AB 2257.  Newspaper carriers will also be exempted through 2022. 
 
The bill also has clarifications to exempt business-to-business contracting and services offered sole proprietorship businesses or limited liability corporations.
 
But some argue the bill does not go far enough and want to see a full repeal of AB 5, which has hit gig workers particularly hard amid the COVID-19 pandemic, with many laid-off workers struggling to make ends meet.
 
Patrice Onwuka, senior policy analyst at the Independent Women’s Forum, issued a statement which reads in part, “Lawmakers ought to fix the mess they created.  Granting exemptions to those with big microphones or deep pockets isn’t the way to do it. It’s undemocratic and unfair to those without the resources to lobby for special treatment. It’s time to fully repeal this flawed law.”  
 
She says her organization speaks daily to people who lost incomes and livelihoods due to AB 5, which has been particularly hard on women and others who “cant or simply don’t want to work for at traditional employer because of caregiving responsibilities, health concerns, or other priorities. In a recent poll, 82% of independent contractors said they prefer being independent contractors over being a W-2 employee.”
 
AB 2257 sailed through the Assembly 74-0 with all San Diego area Assembly members voting in favor. Thee was no floor discussion on the measures, which passed in the final hour of the final day of the 2020 Legislative session. 
 
The measure has broad support from a coalition of busines and labor groups, but was opposed by the Taxicab Paratransit Association.  The gig driver ridesharing industry, including Uber and Lyft,  was the most high profile target of AB 5.  
 
A court rule AB 5’s provisions were legal to apply to ridesharing companies, prompting Uber and Lyft to threaten to leave California, but the companies backed off after a higher court allowed them to continue operating under the old rules pending appeal.  The ridesharing company also has an initiative on the California ballot that would repeal application of AB 5 to their industry, but not others.  
 
Many other occupations are not included among the exemptions, including any classified as hazardous by the Occupational Health and Safety Administration (OSHA).
 
San Diego mayoral candidate Barbara Bry is among those calling for more reforms of AB 5.  Bry has urged the Legislature to "move past the political agendas and get serious about creating new legislation that both protects independent contractors and reflects the changing nature of our work force and our economy. AB 5 has already had devastating impacts on many sectors of our economy, from small and minority-owned businesses to musicians and other artists,” said Bry. “But for thousands of San Diegans who rely on Lyft and Uber for vital assistance as they struggle to survive the COVID pandemic, they can’t afford more inaction by the Legislature."

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